Mr. Eggar : I am still trying to respond to the hon. Member for
Bassetlaw, and I will then give way to the hon. Members for Midlothian (Mr.
Clarke) and for Stoke-on-Trent, North--all of whom have been present for
the debate. If I do not answer the question of the hon. Member for Bolsover
in that way, I shall then give way to him.

I am confident that we can safeguard the genuine and current recreational
use of land, but I ask the hon. Member for Bassetlaw to allow us to do that
in a flexible and sensitive way.

7.45 pm

Mr. Eric Clarke : One cannot pigeon-hole every case. There are
examples in my constituency of recreational open space in an old mining
village that the community or local authority wants to revitalise. There
are periods when people move away--but when they get their assets together
again, they move back and want to revitalise the area. If recreational and
open spaces are surrendered to the highest bidder, that land might be used
for the wrong reasons. It should be redeveloped in conjunction with the
local people and local authority, who should have the first option to
purchase--not the highest bidder. I hope that the Minister accepts that
principle

Mr. Eggar : I cannot quite go down that route. Even when CISWO
wanted to redeploy an asset such as a convalescent home that was not fully
utilised, it had difficulty reaching an internal agreement. I do not want
to misconstrue CISWO's response, but I made the point to that body that
when it is reconstituted as a charitable trust, it must be able to take
difficult decisions. That picks up the point made by the right hon. Member
for Berwick-upon-Tweed.

I want to act as sympathetically as possible, but I suspect that, from time
to time, some recreational land and buildings may have to be sold against
local vested interest but for the greater good of social welfare within
mining communities. That will not be easy, and the hon. Member for
Midlothian and others will probably have to take the lead in local cases.
We must not go against the whole thrust of the work of CISWO and the
welfares in order to respond to local needs. If we impose much from the
centre, there will be a loss of benefit.

Does the hon. Member for Stoke-on-Trent, North still want to intervene ?

Ms Walley indicated dissent .

Column 344

Mr. Eggar : In that case, I give way to the hon. Member for
Bolsover.

Mr. Skinner : I heard the Minister's reply to my hon. Friend the
Member for Bassetlaw (Mr. Ashton) and the ensuing exchanges. The Minister
said that, given some flexibility, most land would be retained. Will he
undertake an audit of CISWO's land and establish how much of it is used for
recreational and other purposes ? If 80 per cent. of that land is used for
football, cricket and so on, will the Minister guarantee that he will write
into the Bill that no less than 80 per cent. will continue to be used for
recreational purposes ? That way, any land over and above that not being
used for recreational and social purposes could be sold off.

Mr. Eggar : I can say that I have asked for--I use the word loosely-
-an "audit" of the land that British Coal believes that it owns.

Mr. Skinner : Not all the land.

Mr. Eggar : The hon. Gentleman is quite right. CISWO and the
welfares may also own land and assets. I do not want to get into the
business of telling CISWO what to do with the land and assets that it owns.
I am concerned only with the land and assets that British Coal owns, or
believes that it owns. I suspect that there will be some dispute over
title.

The next stage is to look carefully at that land and identify that which is
used currently and actively for recreational purposes. We then need to see
how we can provide the best assurance that the land will be retained for
those purposes. Again, I say do not let us lock ourselves into the concept
that it is to everybody's advantage, so to speak, that we should guarantee
that a football pitch will for ever be a football pitch. The changing age
profile in villages, for example, may well mean that people want to start
playing bowls. Or the growing attraction of tennis may mean that, if they
can raise the money for a tennis court, they should be able to redeploy the
land. They might want to sell off part of the land to maximise its use. We
must be careful that we do not freeze everything for current uses.

Mr. Redmond : I am grateful to the Minister for giving way as this
is an important point. The community, not CISWO, owns the land and
facilities. Therefore, CISWO is beholden to ensure that it serves the
community and not become some quango that is there to make a fast buck and
sell the land for profit. I hope that the Minister will accept the
community's need, not some small body, to make the decisions about future
needs.

Mr. Eggar : The hon. Gentleman exposes the difficulties that I have
when I try to respond to ideas of legislation. Some local welfares might be
willing to have CISWO in a fiduciary capacity in some way ; others,
frankly, would not have it anywhere near the place. If I try to impose one
system, which is the thrust of the Opposition amendment, I would please one
group but offend another, so I plead for an acceptance that a flexible
approach, as locally based as possible, is the right way forward. I believe
that the way that I have tried to proceed should command the respect of the
House.

Mr. O'Neill : We are grateful to the Minister for taking
interventions and making a telling point in what was a fairly long speech.
He has gone some way at least to

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meeting some of our concerns. But we have to
be guided in some respects by the response of the trustees of CISWO, who
gave his proposition a cautious welcome.

The Minister said that the dialogue is continuing. It cannot continue ad
infinitum. There has to be an end. It is clear that there are more things
to be played for at this stage. We hope, therefore, that he is now more
aware of some of the problems, because some of them emerged during the
discussions that have been under way since October or November of last
year. For those reasons, I shall seek the leave of the House to withdraw
our amendment in the expectation that, if necessary, it will be looked at
elsewhere. I am sure that the Minister will accept that, if we do not get
satisfaction through legislation, there will be debates on the Floor of the
House later this year to ensure that if the transfer of ownership takes
place, CISWO and the communities that depend on the welfare organisations,
regardless of the umbrella under which they operate, are represented and
protected in the way that we see fit.

I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn .

Schedule 5 --

Pensions Provision in connection with Restructuring

--

Mr. Bell : I beg to move amendment No. 17, in page 101, line 25, at
end insert--

(aa) for securing that, if modifications are made pursuant to sub-paragraph
(a) above, provision shall be made for an independent person to have power
to appoint and remove the chairman of the trustees who shall himself be an
independent person, and for this purpose a person is independent if

(i) he is not entitled to any pension right which gives rise to a pension
obligation under the existing scheme ;

(ii) he is not employed in the Civil Service of the Crown, whether in an
established capacity or not, and whether for the whole or part of his time
;

(iii) he is not a member of Her Majesty's Government in the United Kingdom
; and

(iv) he is not a member of the House of Commons ;

and the period of appointment of the chairman shall be for a fixed term not
exceeding five years.'.

Over the years, we have been given a number of assurances in relation to
pensions. In October 1991, the former Secretary of State for Energy, Lord
Wakeham, said on the privatisation of the coal industry :

"the pension interests of both current and past employees of the British
Coal Corporation will be properly safeguarded."

Further assurances were given on the same subject by the Minister for
Energy on 29 June 1992. He said :

"I say quite categorically that we are committed to safeguarding pensions,
we will safeguard pensions, and we will use the most appropriate method to
do just that."

A few days later, he gave a clear and unequivocal commitment that the
British Coal pension fund would not be ripped off. He made the same
statement when we discussed the matter further on the Floor of the House.

The Government have been helpful to the Opposition and interested parties
in providing a series of documents covering the issue of pensions.

I now refer specifically to amendment No. 17, which has the purpose of
inserting a new sub-paragraph (aa) that requires the Secretary of State to
make proposals for the appointment of an independent chairman of trustees
if he exercises the powers envisaged in sub-paragraph (a). That would
enable the Secretary of State to make arrangements

Column 346

for the appointment of trustees. The current
mine workers' pension scheme trustees believe it vital that beneficiaries
of the scheme can feel confident that the chairman of trustees is able to
exercise his or her responsibility without fear of Government pressure or
interference.

Officials of the Department of Trade and Industry have made it clear to the
present trustees that they envisage that new trustees will exercise full
fiduciary responsibilities. We believe that the Government should welcome
this opportunity to demonstrate that the new trustees will be able to act
responsibly. In some respects, it should be an advantage to the Government
to concede that point, as they would gain greater support and acceptance
from the beneficiaries and would also be assured that an independent
chairman would have to pay due regard to the guarantor's interests as well
that of beneficiaries. The guarantor is likely to play a significant role
in the working of the scheme.

In our view, an independent chairman would offer a measure of
counterbalance. In addition, it is suggested that the period of appointment
of the chairman could be limited to a fixed term, perhaps not exceeding
five years. We are aware that there are continuing negotiations with the
Government on that point. We are aware that the trustees would prefer a
body, independent of the Secretary of State, to make the appointment. Our
proposed amendment suggests certain criteria for independence that would
have to be met by the appointer and appointee precluding any civil servant,
Minister, Member of the House of Commons or beneficiary of the scheme.
Therefore, in our view, it remains possible that the Government would
accept such a condition and therefore the points are made in a non-
partisan, non-political way. On that basis, I commend the amendment to the
House.

Mr. Eric Clarke : I shall be brief, as the Minister gave guarantees
in Committee. I was a trustee of the miners' pension fund for many years.
We took the role very seriously and educated ourselves as best we could as
lay members of a sophisticated and successful pension fund. One aspect that
was always underlined to us was that, although we were appointed to
represent the members of the NUM--there was a UDM member in the company, as
well as the trustees who were appointed by British Coal--we were legally
independent. In other words, we were responsible as individuals, not to our
organisation, but to the fund itself. That was underlined on every occasion
by our legal advisers and other people. The appointment of this person is
dear to the hearts of the people who are in the fund.

It was once said that the lifeboats on a ship belong to the crew on a cargo
ship--or otherwise to the passengers as well. The pension fund belongs to
its members. That is the way I look at it. I hope that all the cynicism
attached to the Maxwell fiasco has made us very cautious. People outside,
especially members of pension schemes, are certainly extremely worried in
case something in the Bill will in some way undermine their rights so that
someone will be able to cream off money. I hope that when the Minister
replies he will be able to reassure us.

The amendments would be in no way detrimental to the Bill ; they will
simply add to the assurances demanded by the pensioners, of whom there are
a great many. In fact, there is a huge army of them out there. The Minister
should think of the former size of the industry and then of the number of
pensioners watching closely to see how the

Column 347

matter is handled. If I go to any public
function, or indeed any gathering of people of a certain age in my
constituency, the subject of pensions, especially miners' pensions, raises
its head nine times out of 10.

8 pm

The protection requested for the post-privatisation pensions agreement is
reasonable, as is the limiting of the Secretary of State's discretionary
powers to the period before 31 December 1995. We ask for a limit. We do not
say that there is no responsibility, or that the Secretary of State is not
answerable to the House, but there must be a curb on the laissez-faire
independent powers.

The final provision would impose a duty to act in good faith towards the
beneficiaries of the pension schemes when using the power to act in the
national interest. There could be a conflict of interests here, but I hope
that the balance will lean towards the individual pensioner or pensioners.

I am proud of the fact that I was a member of the fund for years. It has
been most successful, and the people who ran it and invested in it, and the
CIN, have something to be proud of. They were not only successful
financially but created a lot of jobs. They invested in this country and
elsewhere to create work with risk capital. I am proud of the fact that
they used the money. They did not buy art treasures, stick them in a vault
and watch them appreciating. They invested the money where it was needed. I
am certain that the members of the pension fund wanted the money to be used
in that way. I hoped that things would continue in that way, but the
Government have not accepted that idea. The fund could have been treated in
such a way that someone who worked for any of the privatised companies
could still be a fully fledged member of the pension fund. But the
Government said no, froze the fund at that point and gave the new emerging
companies the right to negotiate with someone outwith the fund. I see no
logic in that, apart from ideological logic. I thought that people would
have been invited into a worthwhile thriving pension fund--but that is the
way the cookie crumbles.

I hope that the Minister will accept the amendment.

Mr. Eggar : The whole House recognises that discussions are
continuing between the Government and the trustees of the two schemes.
Progress is still being made, and I hope that nobody in the House will
press for a detailed disclosure of exactly where we are. On the substance
of the amendment, the Government recognise that the chairman should carry
the confidence of the fellow trustees and the beneficiaries. We also
recognise the fact that the

Government-appointed trustees, like any trustees, will owe fiduciary duties
to the beneficiaries of the scheme. That is most important. The Department
is currently discussing with the trustees the arrangements for appointing
the chairman. That is one of the issues that is taking up a fair amount of
time. I hope that we shall be able to resolve the matter by the full
agreement of the trustees in a way satisfactory both to them and to the
Government, so I recommend that the amendment be withdrawn.

Mr. Bell : I am grateful for the Minister's response, and for the
interventions by my hon. Friend the Member for Midlothian (Mr. Clarke), who
cast his net rather on the wide side for amendment No. 17. Nevertheless, he
raised

Column 348

the subject that preoccupies many members of
the pension fund, and certainly those who are the trustees. The question is
: who owns the pension fund ?

Ms Walley : Does my hon. Friend agree that many people involved,
especially the trustees, have put a great deal of work into trying to
impress upon the Minister the importance of independence ? If there is no
independent advice and no independent chairman, how can we have trust ? I
wish to bring to my hon. Friend's attention the great work that has been
done on this matter, especially by Mr. Joe Wills, in my constituency.

Mr. Bell : I am grateful to my hon. Friend, who has clearly taken a
strong interest in the matter. The Minister has mentioned the importance of
having an independent chairman, and in Committee we were told that the
negotiations were still continuing. We had hoped that by this stage they
might have been completed, which would have enabled the Government to table
amendments on pensions for Report. We are aware that the negotiations are
still continuing, and we are in close touch with the trustees of the
various pension funds. I hope, as the Minister probably hopes--no doubt he
will wish to take into account the comments made both in Committee and
tonight--that the issue will be settled and the negotiations completed, so
that the Government will be able to table amendments in another place. On
the basis of the Minister's comments and of the interventions by my hon.
Friends, I beg to ask leave to withdraw the amendment. Amendment, by leave,
withdrawn.

Mr. Bell : I beg to move amendment No. 19, in page 102, line 37, at
end insert

(10A) The power of the Secretary of State to make regulations under this
paragraph shall not be exercisable at any time after 31st December 1995.'.

We are concerned that any arrangements entered into at privatisation for
securing pension benefits should be as watertight as possible and should
not provide an easy way to alter the position in future. The amendment
would impose a time limit on the regulation-making powers.

It is accepted that, to secure an orderly transition to privatisation, it
is necessary and proper for the Secretary of State to have powers to modify
the scheme. However, the Bill as drafted places no limit on the time during
which the Secretary of State can exercise those powers. That would enable a
future Secretary of State to modify the scheme and undo elements of the
arrangements agreed at the time of privatisation--although we accept that
there is a restriction to prevent the power being used to reduce accrued
benefits.

The exercise of the powers in that way would clearly be contrary to the
original purpose. The insertion of proposed subsection (10A) would prevent
the Secretary of State's powers from being exercisable at any time after 31
December 1995. That would allow a reasonable period within which any
drafting errors could be remedied. We accept that it may not be possible to
get the necessary modifications right the first time, but our amendment
would reassure the beneficiaries that no power of modification would be
extant in the long term. After 31 December 1995 further modification of the
scheme could be achieved only through the use of the scheme's amendment
power. On that basis I commend the amendment to the House.

Column 349

Mr. Eggar : I shall first I pick up the point made by the hon.
Member for Middlesbrough (Mr. Bell) at the end of his comments about the
previous amendment. Yes, in an ideal world, I would have liked to come to
the House with agreed amendments to the Bill. It has not proved possible to
reach agreement with the trustees. It has taken longer than we anticipated.
I very much hope that we shall reach agreement, and shall therefore be able
to go to the other place with amendments in due course.

The hon. Gentleman has presented the substance of the amendment fairly.
There are restrictions on the ability to use the existing proposed powers
to reduce accrued benefits. It is generally recognised that there needs to
be a time during which discussions can take place in case there have been
any oversights during the drafting of the arrangements. The precise length
of time is still under discussion. The length of time suggested by the hon.
Gentleman's amendment is not entirely out of the ball park of what is being
discussed. I am not sure that we shall agree on that particular period, but
that sort of concept is being considered.

Mr. Bell : I am grateful to the Minister for responding in kind to
the amendment. He was gracious enough to do the same in Committee. We
welcome the various assurances that he gave on the previous amendment, the
question of a time scale and the hope that we may see amendments to the
Bill tabled in other place.

On the basis of the Minister's assurances, I beg to ask leave to withdraw
the amendment.

Amendment, by leave, withdrawn.

Mr. Bell : I beg to move amendment No. 18, in page 102, line 49, at
end insert and

(c) so much of any pension obligation arising under the scheme as derives
either from modifications of the scheme made after the restructuring date
or from any surplus of assets of the scheme over what is required for
meeting pension obligations under the scheme.'.

Mr. Deputy Speaker (Mr. Michael Morris) : With this, it is
convenient to consider the following amendments : No. 20, in page 107, line
6 at beginning insert

Subject to sub-paragraph (5A) below,'

No. 21, in page 107, line 18 at end insert

(5A) Where any modification by virtue of this schedule of any existing
scheme confers any powers on the Secretary of State, the Secretary of State
shall, in exercising those powers, owe the same duty of good faith to all
persons who are entitled to any pension rights which give rise to pension
obligations under the scheme as an employer would owe in exercising similar
powers under an occupational pension scheme.'.

Mr. Bell : Amendment No. 18 deals with the post-privatisation
benefits improvement aspect of pensions. One of our major concerns is that,
under the proposed arrangements, it would be possible for the value of
pensions payable to beneficiaries to be reduced in cash terms from year to
year because of the way in which beneficiaries are to share future
surpluses. The draft scheme and rules in the Bill provide for half of any
such surplus to be placed in a bonus augmentation fund from which any
additional benefits would be paid. As the proposals presently stand, the
bonus payments will not be guaranteed and may be withdrawn following
subsequent actuarial valuation, thus causing the value of pension payments
to fall despite the existence of the guarantee. In

Column 350

the past, benefits to pensioners from
surpluses have become a part of the normal pension and been subsequently
indexed.

8.15 pm

We therefore consider that the present proposals fall too far short of what
beneficiaries may reasonably expect, based on the historical position. The
amendment is something of a halfway house, as it would include in the
definition of principle pension obligations any payments made from the
bonus augmentation fund, so that they would be covered by the Government
guarantee. Amendment No. 18 does not require the index linking of such
payments to be covered by the guarantee in paragraph 2(11)(b) of schedule
5. That would operate only in paragraph 2(11)(a) and not extend to the
provision set out in the amendment. I hope that the House will excuse me
for being technical about the amendment, but its importance is understood
by the Government.

We are aware that the trustees are continuing to have discussions with the
Government on that issue, but I do not believe that the trustees are
entirely happy that the proposals as they stand are sufficient to provide
proper security for pensioners, and think that a position that leaves open
the possibility of pensions being reduced is unacceptable. My hon. Friend
the Member for Midlothian (Mr. Clarke) has already commented from his own
experience on the benefit and importance of such a scheme.

Amendment No. 20 deals with the duty of good faith of the Secretary of
State. Paragraph 5(5) of the schedule provides the Secretary of State with
powers to direct the trustees in the exercise of their duties so as to have
proper regard to the national interest. That power could be exercised in
relation to scheme investments, actuarial assumptions and the distribution
of the beneficiaries' share of surpluses. The provisions of that paragraph
are also reflected in the draft scheme and rules, although they are subject
to continuing discussions with the Government. Again, discussions are
continuing between the Government and the trustees.

Amendment No. 21 would add a new sub-paragraph, (5A), which provides that
the Secretary of State owes a "duty of good faith", analogous to that owed
by employers in an occupational pension scheme, to all persons entitled to
pension rights under the scheme. The employer acts as a guarantor in most
final salary occupational pension schemes by ensuring that the scheme is
adequately funded. By that method, the members' benefits are properly
safeguarded. In carrying out his role under the pension scheme, the
employer is entitled to protect his own interests, but in so doing he must
not act contrary to his duty of good faith to the members.

Labour Members feel that it is appropriate to reflect that balance on the
face of the Bill, with the Government as guarantor to the scheme. It is
vital that some acknowledgement of the interests of the beneficiaries
should be included in either the Bill or the draft schemes and that
paragraph 5(5) should be substantially amended. We acknowledge that the
Government, as guarantor, will have an interest in investment policy, but
feel that that should not extend to being able to direct investment policy
without regard to the beneficiaries. Any power for the Government to
intervene should be tightly drawn and be used only in extreme
circumstances, allowing the trustees in normal circumstances to set
investment policy in the light of the scheme's experience. We do not accept
that the

Column 351

Government should have power to interfere in
actuarial assumptions. Those should be a matter for the scheme's actuary in
consultation with the trustees and should not have any influence on the
distribution of surplus to the beneficiaries.

If I may use a Latin phrase, which will no doubt please my hon. Friend the
Member for Sunderland, North (Mr. Etherington), who, although he is not in
his place, graced our Committee proceedings with lengthy words and a great
knowledge of the English language, amendment No. 21 lives or falls by the
principle of res ipsa loquitur--it speaks for itself.

Ms Rachel Squire (Dunfermline, West) : I shall speak in support of
all the amendments covering pension provision, but especially in support of
amendments Nos. 20 and 21, because the future pension provision for retired
miners, those currently working and those yet to be employed is of great
concern to the miners and families in my constituency. As hon. Members will
know, Longannet is the only deep mine left in Scotland. It borders on my
constituency and I have yet to meet a family in west Fife who do not have
some past or present connection with the mining industry. Given that, at
one time, there were 66 pits in Fife, that is hardly surprising.

Only two years after the Government came into office, there were still
4,000 miners employed in Fife. Now there is less than a quarter of that in
the whole of Scotland. The statistics mean that hundreds, if not thousands,
of miners and their families in my constituency are concerned about the
Government's proposals for the two pension schemes.

It is encouraging to hear mention of the assurances that the Government are
giving and of the discussions that are taking place with trustees, but the
people of west Fife are deeply distrustful of promises and assurances given
by the Government. I shall explain why. First, my view and that of my
constituents is that if the Government had the genuine national interest
that is referred to in the pension proposals, they would not have
introduced the Bill in the first place. I place on record my deep and total
opposition to coal privatisation because of the effect that it will have on
pay, pensions and safety. There is not a shred of evidence that private
mine owners and the Government have any concerns other than their profits
when it comes to dealing with the coal industry.

I was reading some old newspaper cuttings and came across one about Lord
Fitzwilliam. In 1873, he said that he was the owner of mines simply as a
fund for himself and his family and they were to be used with regard only
to his caprice

Mr. Deputy Speaker : Order. I am having some difficulty relating
1873 to pension policy in the future ; perhaps the hon. Lady will come to
that.

Ms Squire : What I am saying is that I support the amendments
because we are concerned that the Government are looking at the two British
Coal pension schemes in the way described by Lord Fitzwilliam back in 1873-
-that is, from the basis of their caprice and self-interest.

The second reason why my constituents and I question the proposals for the
two pension schemes--the mineworkers pension scheme and the staff
superannuation scheme--is their value of about £17 billion. That
causes great concern to my constituents, miners, pensioners and their
families because they are afraid that the Government

Column 352

have a hidden agenda. They are afraid that
privatisation could threaten the security of current and future benefit
payments, they are afraid that it could affect the real value of benefits
paid and they are afraid that those who are still employed in the industry
after privatisation could be denied equivalent pension rights. The third
reason why my constituents seek more than mere assurances from the
Government is the abuse of pension schemes, which other hon. Members have
mentioned, most notably, the Maxwell pension scheme. Only yesterday, there
was a report in the Scottish papers about a Lanarkshire steel company which
took over part of the industry after British Steel was broken up and
privatised. The company used £300,000 from the pension fund to prevent
the business from failing, and £80, 000 of the money, which included
workers' pension payments, remains unaccounted for. That is why we are
looking for something wider than a national interest in this part of the
Bill.

My fourth reason for supporting the amendments is that a balance must be
struck between the interests of the taxpayer, whom the Minister claims to
represent, and the interests of the beneficiaries of the schemes. The
powers proposed in this part of the Bill are wide. What will happen if
there is a conflict of interest between the national interest as defined by
the Secretary of State and the views of the trustees in the three key areas
of investment policy, actuarial valuations and the distribution of
surpluses ? Whose view would carry weight in those circumstances ?

I know that time is short ; there is a great deal more that I should like
to say. I ask the Minister to look supportively and favourably at the
amendments and recognise the national service and interest that past and
present miners have given to the industry. As the hon. Member for
Dunfermline, West, I seem to spend most of my time talking about security,
insecurity and uncertainty, whether with regard to defence-related
industries or, as today, the coal industry and the pension schemes. We are
looking for a small lump of security in what otherwise seems to my
constituents who have a connection with mining pensions as a massive seam
of uncertainty.

Mr. Eggar : I do not think that the hon. Member for Dunfermline,
West (Ms Squire) had any misconceptions, but the Government have given a
categorical assurance about safeguarding people's pensions and I do not
want her to alarm her constituents needlessly. What the amendments are
about, especially amendment No. 18, is the precise terms of the Government
guarantee. After extensive consultation with the trustees, the Government
have agreed that a guarantee will be available to ensure that the pension,
as from its base point, rises in accordance with the retail prices index,
whatever happens with the actuarial position. The amendment would
effectively extend the Government guarantee to pension increases above the
RPI. It is the Government's position that that is not a reasonable
expectation on behalf of the beneficiaries ; it is perfectly fair for the
Government to give an RPI guarantee but not that the bonus element of the
pension should be guaranteed. It would be wrong to expect the taxpayer to
provide a guarantee along those lines.

It would be wrong to guarantee bonuses from actuarial surpluses which prove
on subsequent valuations to have been illusory. The hon. Lady knows that
the assessment of surpluses can vary from time to time according to
investment records and the assumptions that are made. The

Column 353

whole sector is difficult. At present, it is
a matter of detailed discussion with the trustees and between the
Government Actuary and the trustees' actuarial advisers. Progress is being
made, but perhaps more slowly than we had anticipated.

Amendments Nos. 20 and 21 are to paragraph 5(5), the wording of which has
always been a sensitive and difficult matter. Paragraph 5(5) relates to the
need of the Secretary of State to be able to act on behalf of the interests
of taxpayers and, equally, for the need of the trustees to be able to
defend, if one likes, the position of the beneficiaries. That matter is
still being discussed. I can honestly report to the House that progress is
being made but we have not quite reached agreement.

Mr. Bell : I am grateful to the Minister for those responses. We are
also grateful for the comments made by my hon. Friend the Member for
Dunfermline, West (Ms Squire) because she has sat here for a long time. We
all listened with great interest to what she said. She has spoken in a
debate on pensions which is of extreme importance to many thousands of
people. She referred to the £17,000 million in the pension fund, which
is a significant amount by anyone's standard. We had important debates in
Committee on the matter and we went into it in great detail. As the
Minister said, the matter is still being discussed and negotiated with the
trustees of the pension schemes. I do not wish to extend the scope of the
amendments or the debate, but the consequences of the abuse of pension
schemes, such as that by the late Robert Maxwell, are not far from our
minds. There are many parts of pension law to which the House will return.
As my hon. Friend said, a balance must be struck between the beneficiaries
of the schemes and the taxpayers. We heard a great deal about that in
Committee. The point made by my hon. Friend, which will rest with the House
and certainly the Minister, is that there is a lump of insecurity and a
massive seam of uncertainty in the country. I come back to the point, on
which the Minister has touched, that the negotiations have gone on longer
than one would have thought. They went on during the Committee and have
continued through Report. We are anxious but hopeful that the negotiations
will be satisfactorily concluded in the interests of all parties. I ask the
Minister to bear in mind--I am sure that he will--that we shall be looking
for proper amendments to the Bill as a consequence of the successful
conclusion of the negotiations before the Bill passes to the other place.
We shall be looking for that with great anxiety on one hand and insistence
on the other. Otherwise, we may be returning to the issues on the Floor of
the House in another context.

However, on the basis of what we have heard tonight, and fully
understanding that negotiations are taking place, I beg to ask leave to
withdraw the amendment.